Observatory on public water and sanitation services. Overview of services and of their performance
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1 Observatory on public water and sanitation services Overview of services and of their performance February 2012
2 CONTEXT Initiated in 2009, the observatory on water and sanitation services offers national online access ( to public data on the organisation, management and performance of services. These elements are used to evaluate the economic, technical, social and environmental quality of services on an objective, recognised basis, shared by all stakeholders in the water sector. In the long term, the observatory will thus go beyond simple reasoning in terms of the price of water and cover all the technical and financial issues related to services. Using the observatory's data, this initial overview offers markers on the organisation, quality and price of water services and collective sanitation. It also clarifies the sustainable assets management issues facing services. AUTHOR(S) AND CONTRIBUTOR(S) Maria Salvetti, economist, ONEMA, Contributor : Christophe Wittner, engineer, IRSTEA-ENGEES, christophe.wittner@engees.unistra.fr Reproduction rights: Public Keywords: Public water and sanitation services, performance Geographic cover: France Geographic level: National Level of interpretation: Professional Language: French Circulated by: Office national de l eau et des milieux aquatiques (Onema French National Agency for Water and Aquatic Environments)
3 ABSTRACT Key figures of the first overview of services and their performance More than 31,000 water and collective sanitation services: 14,217 drinking water and 17,228 collective sanitation services; 4,500 intermunicipal groups in charge of water and/or sanitation services. Average price of water and of collective sanitation: 3.62 incl. VAT/m 3 Sum of solidarity actions: /m 3 for water services and /m 3 for collective sanitation services. Unpaid bills rate: 0.7% for water services and 1.47% for collective sanitation services. Compliance rate of samples taken from distributed water: 98% for microbiology and 97% for physicochemical content. Occurrence rate of unscheduled service interruptions (for 1,000 customers): 4.43 Complaint rate (for 1,000 customers): 7 for water services and 4.3 for collective sanitation services. Asset knowledge and management index (out of 100 points): 57 for water services and 56 for collective sanitation services. Average rate of network renewal: 0.61 for water services and 0.71 for collective sanitation services. Efficiency of the drinking water distribution network: 76%. Leakage index: 3.9m 3 /day/linear km of network. Water resource protection improvement index (out of 100 points): 76 Effluent overflow rate in consumers' premises (for 1,000 inhabitants): 0.17 Number of collection network points requiring frequent dredging (per 100 km of network): 13 Rate of sludge from sewage treatment plants evacuated according to compliant processes: 98%. Index of knowledge on discharge into the natural environment by wastewater collection networks (out of 120 points): 95.
4 CONTENTS 1. Introduction Representativeness of performance indicators collected in Representativeness of the performance indicator database in terms of... number of services Representativeness of the performance indicator database in terms of population The performance indicator availability rate Descriptive analysis of public water and sanitation services Overview of the organisation and management of drinking water services Limited functional fragmentation of services but major geographic fragmentation Two-thirds of the French population are supplied by an intermunicipal water... agency Services mainly managed directly by the competent local authority but the... majority of the population supplied by a delegated operator An average drinking water price of 1.90 /m 3 and a continuous drop in... consumption Overview of the organisation and management of collective sanitation... services Geographic fragmentation of collective sanitation services is stronger than for drinking water There are few intermunicipal collective sanitation services but they supply two-. thirds of the connected population Predominance of direct management Price of collective sanitation Analysis of performance indicators for water and collective sanitation... services Public drinking water service typology Principle of the approach and methodology Results of the classification Performance analysis of public drinking water services Asset management and knowledge: a major challenge for water services Financial management of services: a measured indebtedness for long-term infrastructures High-quality services for consumers Performance analysis of public collective sanitation service Collective sanitation: know what your assets are to manage them better Quality of the service for the consumer and financial management Prospects / 81
5 1. Introduction In France, all public water and sanitation services are public and fall within the responsibility of municipal authorities. These may, however, transfer their responsibility to intermunicipal cooperation bodies. The municipal authority or intermunicipal body is free to choose its method for managing the service: direct management or delegated management. Whatever method is chosen, the public authority remains responsible for the quality, smooth operation and sustainability of its service. 36,600 municipal authorities and 4,500 intermunicipal bodies thus manage more than 31,000 public collective sanitation or water services in France. Governance of water and sanitation services relies on regulation through the promotion of service performance and best practices. This system mainly revolves around the definition and monitoring of performance indicators designed as steering tools and targeting results. These good governance instruments should enable operators to achieve a certain quality of service and guarantee consumer satisfaction. The Ministerial Order and Decree dated 2 May 2007 define a list of 29 statutory performance indicators to be calculated annually by each collective or non-collective sanitation and water service. The observatory on public water and sanitation services aims to collect and bring together data and information relating to these statutory performance indicators. Initiated in November 2009 by the French National Agency for Water and Aquatic Environments (Onema), the observatory on public water and sanitation services is a tool for local authorities and service operators to help them steer their services, monitor changes year-on-year and assess general performance of their service. It is also a means of informing consumers and citizens who want to be able to access transparent information on the price and quality of the water and sanitation service. The observatory is backed up by a national database that brings together information on the performance of public water and sanitation services. Municipal authorities and intermunicipal bodies report performance indicators and contextual data to input the database. Public and private operators, which contributed to the definition of these indicators, produced data to calculate them. In each department (or county), Territorial and Marine Services (DDTMs) support local authorities in the input of data and monitoring of their consistency. Data collected concern the features of the service (management method, type of water resources, billing details, pricing terms, etc.) and offer a technical and economic description (economic indicators, number of inhabitants supplied with drinking water, connected to a wastewater collection system or non-collective sanitation system, etc.) These first two types of data are used to characterise the service and group together the same types of service in order to compare them. Other indicators complete this description to analyse service performance: compliance of distributed water, performance of sewage treatment plants, estimated leakage, etc. In the long term, this base will offer a complete overview of the French situation, through inter-annual monitoring of indicators. To summarise, the observatory offers consumers a versatile tool for: - steering services within the framework of governance through performance; - calculating indicators and preparing the annual report on the price and quality of services; - distributing transparent information on services to consumers. This report is the first inventory on the quality and performance of water and sanitation services following the processing and interpretation of the observatory's data. Every year, the observatory's database is structured around a reference repository listing all French public water and sanitation services and specifying their competence, their management method, location and population. This repository therefore provides a precise mapping of the organisation and management of services in France. Once the repository has been completed, services enter their performance indicators and variables into the database. This report highlights the exhaustive information of the 2009 repository and performance data for a sample of services. The observatory's work is approved by the French National Water Committee s commission on financing of water and sanitation services, which brings together all the stakeholders involved in public water and sanitation service management. 5 / 81
6 2. Representativeness of performance indicators collected in 2009 In 2009, the observatory's reference repository identifies 31,445 public water or collective sanitation services (14,217 in drinking water and 17,228 in collective sanitation). Among these services, 74% are directly managed by the competent authority (69% for drinking water and 77% for collective sanitation). Out of all the services listed in the repository, 4,214 drinking water services (i.e. 70% of the population supplied) and 4,281 collective sanitation services (i.e. 59% of the connected population) registered their performance data in the observatory s database. Facts and data concerning non-collective sanitation are not included in this report as the information gathered to date does not seem dependable and complete enough for use. The performance indicators presented in this report are defined in appendix 1. When a service is available to inhabitants in several departments (i.e. counties), the service is located in the department in which its head office is located. This processing method produces results on the level of the department. However, three services, owing to their large size, receive specific processing. For geographical reporting, data of the SIAAP (Paris conurbation sanitation service) and the SEDIF (Greater Paris water service) are presented at the department level for the relevant departments in the outer suburbs of Paris and are grouped together for the inner suburbs of Paris. For the SIDEN (intermunicipal water service for Northern France), the population has been divided up in real proportions between the three departments covered by the service. Following this processing, the representativeness of the "performance indicator database" sample with respect to the exhaustive repository was tested using the Khi Deux statistical method. Representativeness was checked at the national and department level in terms of population and according to service management methods. However, it should be noted that the analyses describing the general organisation of public water and sanitation services are expressed both in terms of population and services as they are based on the observatory's repository which is exhaustive. Moreover, the quality of performance indicator input was also appraised Representativeness of the performance indicator database in terms of number of services Representativeness of "water" and "collective sanitation" samples was tested in terms of the number of services using the Khi Deux method. KHI DEUX METHOD The Khi Deux method is a statistical method allowing the comparison of the correlation and representativeness of a sample with a total reference population. To conduct this statistical test, the data observed and those describing the reference population are broken down into categories. The test's number of degrees of freedom is defined according to the number of categories created. The algebraic distance between sets of information to be compared is then calculated. If this distance is lower than the one featured in the Khi Deux table, it is possible, with an error margin of 5%, to conclude that the sample is representative of the reference population. The results of these tests are summarised in both tables below. Table 1 : Representativness of drinking water sample in terms of services Drinking water 2009 repository 2009 sample Proportion Total number of services 14,217 4,214 30% Of which in delegated management 4,409 2,097 48% Of which in direct management 9,808 2,117 22% The test concludes that the representativeness of the "drinking water" sample is not satisfactory. 6 / 81
7 Table 2 : Representativness of collective sanitation sample in terms of services Collective sanitation 2009 repository 2009 sample Proportion Total number of services 17,228 4,281 25% Of which in delegated management 3,908 1,870 48% Of which in direct management 13,320 2,411 18% The test concludes that the representativeness of the "collective sanitation" sample is not satisfactory. In view of these results concerning the representativeness of samples in terms of services, it was decided that the analyses on performance indicators presented in this report will not be expressed in terms of number of services. The representativeness of "water" and "collective sanitation" samples was then tested in terms of population Representativeness of the performance indicator database in terms of population The representativeness of "water" and "collective sanitation" samples in terms of population underwent several Khi Deux tests. The first tests looked at the national population supplied with drinking water and collective sanitation services. Table 3 : Representativness of drinking water sample in terms of population Drinking water 2009 repository 2009 sample Proportion Total population 60,878,689 42,468,914 70% Of the population in delegated management 36,100,897 26,845,928 74% Of the population in direct management 24,777,792 15,622,986 63% In the observatory's repository, the population supplied with drinking water was estimated to be 60.9 million inhabitants and therefore does not cover the whole French population. Several factors explain this difference. Firstly, the repositories of certain overseas departments (Guadeloupe, French Guiana and Mayotte) are not recorded in the database. 1.3 million inhabitants are therefore not covered by the observatory. Secondly, the "population" item is not completed for 1,123 municipalities featured in the repository. Thirdly, 73 municipalities in the repository, covering around 400,000 inhabitants, are not linked to a public water or sanitation service. The test on the population supplied with drinking water concludes that the sample is representative of the total population. The same applies to the population connected to a collective sanitation service. Table 4 : Representativness of collective sanitation sample in terms of population Collective sanitation 2009 repository 2009 sample Proportion Total population 57,325,484 33,897,687 59% Of the population in delegated management 24,128,676 14,435,480 60% Of the population in direct management 33,196,808 19,462,207 59% The representativeness of the sample was then tested according to the department s population and not only the national population. The test on the department s population supplied with drinking water concludes that the sample is representative of the total population. The graph below presents variations between the sample (blue histogram - "sample proportion") and the ideal sample that would perfectly represent the exhaustive repository (red line - "total proportion"). The variations between the two are minor: the sample is representative. 7 / 81
8 Figure 1 : Representativness of drinking water sample in terms of population per department The test on the department s population connected to a collective sanitation service is also conclusive. Representativeness was then tested according to the department s population and the service management method. The test on the department s population supplied with drinking water through direct management concludes that the sample is representative of the total population. The result is identical to the one on the department s population supplied with drinking water by a public service through delegated management. The test on the department s population connected to a collective sanitation service through direct management concludes that the sample is representative of the total population. The test on the department s population connected to a collective sanitation service through delegated management concludes that the sample is representative of the total population (see graph below). Figure 2 : Representativness of collective sanitation services in delegated managment in terms of population per department To hone representativeness tests further, the sample was studied by creating population categories. Services were grouped into four population segments: "fewer than 3,500 inhabitants", "3,500 to 10,000 inhabitants", "10,000 to 100,000 inhabitants" and "more than 100,000 inhabitants". The test concludes 8 / 81
9 that the sample is representative of the population per segment. However, in the graph below, an over-representation of services to more than 100,000 inhabitants (category D) and an underrepresentation of services to fewer than 3,500 inhabitants (class A) can be observed. Figure 3 : Representativness of sample in terms of population categories For the record, the sample of the 2008 SOeS survey, based on municipalities and not on services, brought together all municipalities with more than 10,000 inhabitants, 4,030 municipalities with 400 to 10,000 inhabitants and 260 municipalities with fewer than 400 inhabitants. Compared with the sample of the service observatory, the SOeS sample shows a more distinct over-representation of municipalities with more than 10,000 inhabitants (and therefore larger sized services) and more underrepresentation of municipalities with fewer than 10,000 inhabitants (and therefore smaller sized services). The same test per population segment was conducted for drinking water and for sanitation samples. Similar results to those described above for the whole water and sanitation population were obtained. The observatory on water and sanitation services and the SOeS survey The observatory database gathers information on public water and sanitation services. The database from the statistics and observation service (SOeS) survey is build upon a sample of municipalities. Hence these two databases are not conceived upon the same scale. This difference makes any comparison between those two samples very difficult. This partly accounts for the gaps between the results from the observatory and those from the SOeS survey led in Moreover, the sample from the SOeS survey shows a stronger over-representation of services supplying more than 10,000 inhabitants, than the sample from the observatory. Finally, regarding the drinking water price, SOeS survey imputes pollution duty payable to the water agency to the price of the sanitation service, and not to the water service. When correcting this improper imputation and affecting correctly the pollution duty, the drinking water price calculated in the SOeS survey amounts to 1.92 incl. VAT/m3 (and not 1.59 incl.vat/m3). This value matches the one from the observatory. 9 / 81
10 2.3. The performance indicator availability rate Having ensured the representativeness of the sample of services which completed the performance indicator database, the availability rate of the latter was assessed for drinking water and for collective sanitation. The graph below presents the availability rate of performance indicators for drinking water services. It was decided to use all indicators with an availability rate in excess of 30% to ensure satisfactory representativeness of the information. The "debt extinguishment period" performance indicator (P153.2) was unable to be used, despite an availability rate of 33%. To include this indicator, it would have been necessary to have the "annual gross savings" performance variable (VP183) which is only entered for 4% of services. Figure 4 : Performance indicator availability rate for drinking water services For the record, the list of statutory performance indicators for the drinking water service is recalled in the table below : Table 5 : Statutory performance indicators - Drinking water services Code Indicator's name P101.1 Microbiological compliance rate of samples on distributed water P102.1 Physico-chemical compliance rate of samples on distributed water P103.2 Asset knowledge and management and knowledge index of drinking water networks P104.3 Efficiency of the distribution network P105.3 Linear index of unaccounted volumes P106.3 Leakage index P107.2 Average rate of drinking water network renewal P108.3 Water resource protection improvement index P109.0 Sum of debt waivers or payments to a solidarity fund P151.1 Occurrence rate of unscheduled service interruptions P152.1 Compliance rate of new customer maximum connection times P153.2 Length of the local authority's debt extinguishment P154.0 Rate of unpaid water bills the previous year P155.1 Complaint rate Source : Based on the Ministerial Order and Decree dated 2 May 2007 on the annual report on the Price and Quality of water and sanitation services. 10 / 81
11 The graph below presents the availability rate of performance indicators for sanitation services. The same 30% availability rate was applied for descriptive and performance indicators of collective sanitation services. Consequently, the descriptive "service rate by collection networks" indicator (P201.1) was not able to be used owing to its low fill-up rate (27%) and because its representativeness was considered too random. The "debt extinguishment period" performance indicator (P153.2) was unable to be used, despite an availability rate of 35%. To include this indicator, it would have been necessary to have the "annual gross savings" performance variable (VP183) which is only entered for 6% of services. Figure 5 : Performance indicator availability rate for collective sanitation services The list of statutory performance indicators for the collective sanitation service is recalled in the table below : Table 6 : Statutory performance indicators - Collective sanitation services Code Indicator's name P201.1 Service rate by wastewater collection networks P202.2 Asset knowledge and management index of wastewater collection networks P203.3 Compliance of effluent collection with the provisions defined in Decree dated 3 June 1994, amended by the Decree dated 2 May 2006 P204.3 Compliance of sewage treatment equipment with the provisions defined in Decree dated 3 June 1994, amended by the Decree dated 2 May 2006 P205.3 Compliance of sewage treatment plants with the provisions defined in Decree dated 3 June 1994, amended by the Decree dated 2 May 2006 P206.3 Rate of sludge produced by sewage treatment plants and evacuated according to compliant processes P207.0 Sum of debt waivers or payments to a solidarity fund P251.1 Effluent overflow rate in consumers premises P252.2 Number of collection network points requiring frequent dredging per 100km of network P253.2 Average renewal rate of wastewater collection networks P254.3 Compliance of sewage treatment equipment performance with the provisions of the individual act enforcing water regulations P255.3 Index of knowledge on discharge into the natural environment by wastewater collection networks P256.2 Length of the local authority's debt extinguishment 11 / 81
12 P257.0 Rate of unpaid sanitation bills the previous year P258.1 Complaint rate Source : Based on the Ministerial Order and Decree dated 2 May 2007 on the annual report on the Price and Quality of water and sanitation services. 12 / 81
13 3. Descriptive analysis of public water and sanitation services In France, public water and sanitation fall under the responsibility of municipal authorities and their groups which, pursuant to the French Act on Water and Aquatic Environments (LEMA) No dated 30 December 2006, are granted exclusive rights in these domains. The municipal authority or intermunicipal body is free to choose its service management method: direct management or delegated management. 36,600 municipal authorities and 4,500 intermunicipal bodies thus manage more than 31,000 public collective water or sanitation services in France Overview of the organisation and management of drinking water services Limited functional fragmentation of services but major geographic fragmentation Drinking water services comprise a number of steps: production, transport if applicable, storage and distribution. Public service water that runs from taps is taken in its unprocessed form from a watercourse or groundwater. It can also be taken from a spring. It undergoes appropriate treatment to make it drinkable, according to its quality, and is then transported and distributed to households. In 2009, 14,217 public drinking water services produced and/or transported and/or distributed drinking water to almost 61 million people. Table 7 : Distribution of public water services in 2009 according to their missions Production and/or Transport Distribution, Production & Distribution or Transport & Distribution Production, transport & distribution Total Number of services 354 1,374 12,489 14,217 Breakdown as % 2.5% 9.7% 87.8% Population (M inhab.) Breakdown as % 5.1% 4.3% 90.6% In the observatory's repository, the population supplied with drinking water was estimated to be 60.9 million inhabitants and therefore does not cover the whole French population. Several factors explain this difference. Firstly, the repositories of certain overseas departments (Guadeloupe, French Guiana and Mayotte) are not recorded in the database. 1.3 million inhabitants are therefore not covered by the observatory. Secondly, the "population" item is not completed for 1,123 municipalities featured in the repository. Thirdly, 73 municipalities in the repository, covering around 400,000 inhabitants, are not linked to a public water or sanitation service. Around 88% of public drinking water services cover the whole drinking water supply cycle (from production to distribution). Functional fragmentation of drinking water competence is therefore relatively limited. For over 90% of the French population, consumers deal with a single operator for all stages, from production to the distribution of drinking water. However, the geographic fragmentation of drinking water services seems much greater. The map below presents the number of drinking water public services per department as well as the average population per drinking water service per department in The situation can be very different between departments as the number of drinking water services per department can vary in a proportion of 1 in Paris to 402 in Aude. More than 40% of French departments comprise 50 to 150 drinking water services. The average size of services varies greatly as the average population per service varies from 479 in Lozère to more than two million in Paris, the national average being 4,460 inhabitants per drinking water service. 13 / 81
14 Figure 6 : Spatial distribution of public water services in 2009 in terms of inhabitants supplied Departments with the highest number of drinking water services are located in the eastern half of mainland France. Logically, departments with a high average population supplied by a drinking water service are located in the western half of the country Two-thirds of the French population are supplied by an intermunicipal water agency Municipal authorities may transfer their drinking water responsibilities to intermunicipal cooperation bodies (ECPIs). They can take the form of a syndicat or an EPCI with a specific tax system. Syndicats can have a single purpose (SIVU) or may be multi-purpose (SIVOM). Some are said to be mixtes when they comprise both municipalities and EPCIs. There are three types of EPCIs with their specific tax system, introduced by the Act dated 12 July 1999, bearing on the reinforcement and simplification of intermunicipal cooperation: communauté des communes (community of municipalities), communauté d'agglomération (urban area community) and communauté urbaine (urban community). To this list should be added syndicats d'agglomération nouvelle (new urban area bodies) which are also EPCIs with their specific tax system, as well as the metropole, introduced by Act no dated 16 December In 2009, there were 3,481 EPCIs with responsibility for drinking water. The table below presents the proportion of these EPCIs between syndicats and intermunicipal structures with their specific tax system, in terms of the number of services and population supplied. Table 8 : Intermunicipal water services in 2009 Number of services EPCIs with specific tax system Proportion Population (M inhab.) Proportion 234 7% 14 35% Syndicats 3,247 93% % Total 3, / 81
15 It is interesting to note that two-thirds of the French population are supplied by a drinking water service organised through the intermunicipal system. However, there are relatively few intermunicipal water services as they only represent a quarter of all public drinking water services in France. Moreover, there is a clear predominance of syndicats over EPCIs with specific tax systems in terms of the number of services (93%). This predominance is less striking if considered in terms of population (65%). Consequently, the average size of these two types of intermunicipal structure varies considerably: an EPCI with a specific tax system supplies on average around 60,000 inhabitants whereas a syndicat supplies an average of 8,000 inhabitants. The maps below show the number of intermunicipal water services and the relevant population at department level. Figure 7 : Spatial distribution of intermunicipal water services in 2009 The number of intermunicipal water services is higher in the departments located to the north of the Loire river. However, EPCIs supplying the largest population are mainly found in departments with the largest conurbations in the country. Figure 8 : Spatial distribution of intermunicipal water services in 2009 in terms of inhabitants supplied 15 / 81
16 As the table below illustrates, almost 85% of intermunicipal water public services cover the whole drinking water supply cycle (from production to distribution). This result confirms the above observations: the functional fragmentation of responsibilities in terms of drinking water is reduced as, for almost 90% of the population supplied by intermunicipal water services, consumers deal with a single point of contact for all stages, from production to distribution of drinking water. Table 9 : Distribution of intermunicipal water services in 2009 according to their missions Production and/or Transport Distribution, Production & Distribution or Transport & Distribution Production, transport and distribution TOTAL Services ,954 3,481 proportion 8.9% 6.3% 84.8% 100% Population proportion 6.9% 3.5% 89.6% 100% Services mainly managed directly by the competent local authority but the majority of the population supplied by a delegated operator There are two major management methods for drinking water and sanitation services. The local authority can directly manage the service for which it is responsible. In this case, the local authority uses its own resources and personnel to produce and distribute drinking water, manage and invoice customers, repair networks, etc. The local authority may, however, contract with private operators for specific aspects of the service (e.g. customer management). The local authority may decide to contractually transfer management of the service to a private company or mixed economy company that will run the service at its own risk. This is called the delegation of public service. The delegating authority signs an agreement with a delegated operator which can take the form of a public service concession, concession or farming out contract. In all cases, the local authority remains the organising and governing authority over the service. To be more precise, delegated management of public drinking water services groups together farming out1 (4,320 services), concessions2 (80 services) and public service concessions3 (8 services). The direct management mode of public drinking water services brings together public work contracting (9,674 services of which 415 with service provision) and stewardship4 (135 services). The breakdown of public drinking water service management systems is described in the table below: Table 10 : Distribution of public water services in 2009 according to the management methods Delegated management Direct management TOTAL Services 4,408 9,809 14,217 as a percentage 31% 69% 100% Population (M inhab.) as a percentage 59% 41% 100% It is interesting to note that almost 70% of public drinking water services are directly managed by the local authority with drinking water competence. However, in terms of population, the ratio is reversed as almost 60% of the French population is supplied in drinking water by a service managed by a delegated operator. 1 Farming out is a public service delegation contract whereby the delegated operator is in charge of operating the service at its own risk. It invoices customers and maintains equipment transferred to it by the delegating authority. 2 A concession is a public service delegation contract whereby the concessionary operator invests in the equipment needed to provide the service and operates it at its own risk. It also invoices customers. 3 A public service concession is a public service delegation contract whereby the delegated operator is remunerated according to a profitsharing scheme. 4 Stewardship is an operating contract whereby the operator is remunerated on an all-in basis, without any profit-sharing. It is therefore a public procurement contract (like service provision) and not a public service delegation contract. That is why stewardship has been placed in the "direct management" sub-group, contrary to what was done in several other surveys. 16 / 81
17 Figure 9 : Distribution of public water services in 2009 according to their missions These results underline the fact that small drinking water services (supplying fewer than 3,000 inhabitants) tend to be managed directly by the public authority. On the contrary, large drinking water services tend to opt more often for the delegation of public service. Figure 10 : Spatial distribution of public water services in direct management in 2009 More direct management drinking water services are found in the eastern part of France. As water services in eastern France tend to be small in size, this observation confirms that the larger services tend to opt for the delegation of public service. 17 / 81
18 Table 11 : Distribution of intermunicipal water services in 2009 according to the management methods Delegated management Direct management TOTAL Services 1,747 1,816 3,563 5 proportion 49% 51% 100% Population proportion 67% 33% 100% The situation is quite balanced when considering the number of intermunicipal water services. Half of them are in fact directly managed by EPCIs themselves, the other half by a private operator. However, the results are more contrasted when taken in terms of population, as more than two-thirds of the population under the intermunicipal system is supplied by a water service managed as a public service delegation. Therefore the same conclusions as above may be drawn: large intermunicipal groups tend to opt more often for public service delegation. Figure 11 : Distribution of intermunicipal water services in 2009 according to the management methods An average drinking water price of 1.90 /m 3 and a continuous drop in consumption Price of drinking water: 1.90 euros incl. VAT/m³ The average price 6 of drinking water in 2009 was 1.90 incl. VAT/m3, i.e. an annual bill of 228 on the basis of annual consumption of 120m³. This price is broken down as follows: 1.55 /m³ for the water service (i.e. 82%) and 0.35 /m³ for taxes and duties (i.e. 18%) payable to Water agencies (or Water offices in overseas departments) and to Voies Navigables de France. 5 The number 3,563 is higher than the total number of EPCIs (3,481) as different management methods can co-exist within the perimeter of the same intermunicipal group. 6 This price is an average weighted by the number of inhabitants supplied by the service and calculated on the basis of a sample of approximately 3,200 drinking water services representing 62% of the population. The difference observed between the price of drinking water reported by the observatory and the price determined by the SOeS 2008 surveys is mainly explained by the improper imputation of pollution duties to the sanitation service price in the SOeS survey. When correcting this imputation and affecting correctly the pollution duties to the water service price, the drinking water price from SOeS survey amounts to 1.92 incl. VAT/m 3 (see paragraph 2.2 of this document). 18 / 81
19 WATER AGENCIES AND VOIES NAVIGABLES DE FRANCE In mainland France, the six Water Agencies redistribute the duties collected through the water and sanitation bills to support investment by local authorities, industry and farmers. They fund water and aquatic environment conservation and restoration actions as well as coordination and information actions and the monitoring of water quality. Since the 1960s, the Water Agency funding system has contributed to improving public drinking water and sanitation service networks and equipment by pooling together financial resources within river basins. The funds collected by Voies Navigables de France allow this organisation to manage, operate and develop the French network of navigable waterways consisting of 6,200 km of canals and rivers, more than 3,000 structures and 40,000 hectares of rivers falling within the public domain. Water pricing should include a variable share calculated according to the volume of water consumed by the customer. Pricing can also include a set rate (subscription), paid regardless of the amount consumed. The sum of this set rate should not exceed a ceiling defined at 30% or 40% of the total annual invoice of 120 m³ (these ceilings do not apply in the case of tourist towns7). In 2009, the average sum of the set rate observed represented 21% of the annual bill (incl. VAT) for drinking water (base = 120m³) and amounted to It should be noted that 30% of the French population does not pay a set rate on their water bills. It shows major geographic disparities. The lowest price is observed in the department of Pyrénées Orientales with 0.53 incl. VAT/m³. The highest price is found in Martinique: 2.90 incl. VAT/m³. Figure 12 : Spatial distribution of average water price in 2009 Several factors explain the disparities observed on the map: - the geographic context : the further the resource and treatment points are from the municipality, the higher the investments needed to transport water (pipes, pumps, etc); - the dispersion of homes (e.g., departments of Burgundy, Limousin, Midi-Pyrénées) The transportation of water in rural areas, where homes are scattered, requires higher investments than in towns; - tourist activity (e.g. the coastline) : additional investment may be needed to meet the temporary increase in water demand, for example during periods when tourists are present; 7 Order dated 6 August 2007 bearing on the definition of calculation of the share of the water invoice not proportional to the volume consumed. 19 / 81
20 - the quality of untreated water : depending on the quality of water found in its natural state, the service provided can vary in view of the complexity of treatment processes needed to make it drinkable. The map below shows that the high price of drinking water observed in Brittany or Martinique can be partially explained by the use of surface water which is more costly to treat than groundwater. Figure 13 : Spatial distribution of underground water in total raw water in 2009 Moreover, it shows that the average price of drinking water is 10% higher when the service is intermunicipal as it amounts to 1.97 incl. VAT/m³ (as opposed to 1.76 incl. VAT/m³ for municipal water services). This result can be explained by the higher dispersion of homes in the case of an intermunicipal system than in the case of a municipality alone. This "home dispersion" effect thus counterbalances any expected "economies of scale". Furthermore, municipalities tend to group together when production and distribution of water are difficult (owing to the topography for example) and complex (owing to the poor quality of the water resource) and therefore costly. The intermunicipal system thus seems to make drinking water supply more affordable by pooling together resources and means. The average price of drinking water is also about 15% higher when management of the service is delegated to an operator, as illustrated in the table below. However, average prices vary tremendously whether the service is provided through delegated or direct management. Table 12 : Water price in 2009 according to the management methods Price of water incl. Delegated management Direct management VAT/m A number of factors may explain this situation. For example, local governments often delegate the public service when the production of drinking water or wastewater treatment are more difficult and complex due to the poor quality of untreated water (e.g. pesticides or abstractions from surface waters) or regulations impose major environmental constraints (e.g. the European directive on the quality of bathing water). In addition, private companies have specific expenses (corporation tax, R&D costs) that services under direct management do not incur. 20 / 81
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